The future of rules of origin

Application of new GSP rules of origin is foreseen on 1 January 2011 (as regards the rules for determining origin) and on 1 January 2017 (as regards procedures).

The European Commission on 18 November 2010 adopted a regulation revising rules of origin for products imported under the generalised system of preferences (GSP). This regulation relaxes and simplifies rules and procedures for developing countries wishing to access the EU's preferential trade arrangements, while ensuring the necessary controls are in place to prevent fraud. The new rules of origin will apply from 1 January 2011.

The Regulation adopted by the Commission today will considerably simplify the rules of origin so that they are easier for developing countries to understand and to comply with. The new rules take into account the specificities of different sectors of production and particular processing requirements, amongst other things. In addition, special provisions are included for Least Developed Countries (LDCs) which would allow them to claim origin for many more goods which are processed in their territories, even if the primary materials do not originate there. For instance, an operator in Zambia that produces and exports plastics to the EU will benefit from the new rules of origin, because even with up to 70% of foreign input the exported plastics can still be considered as originating from Zambia. These new rules should greatly benefit the industries and economies of the world's poorest countries.

The proposal also puts forward a new procedure for making out proofs of origin, which places more responsibility on the operators. From 2017, the current system of certification of origin carried out by the third country authorities will be replaced by statements of origin made out directly by exporters registered via an electronic system. This will allow the authorities of the exporting country to re-focus their resources on better controls against fraud and abuse, while reducing red-tape for businesses.

The underlying principles for the new regulation, namely, simplification and development-friendliness, were laid down in a Communication on the future of rules of origin in preferential trade arrangements adopted by the European Commission on 16 March 2005 following a wide-ranging debate initiated by a Green Paper of 18 December 2003. The Communication set out a new approach to rules of origin and envisaged that the first concrete application should be to the GSP.

The Communication also favoured a number of measures to ensure compliance by public authorities with their obligations, including a periodic monitoring system. In fact, monitoring actions, which are in the interest of beneficiary countries as well as the Union, have already begun, as a legal change was not required for this purpose.

Background documents:

The 2005 Communication on the future of rules of origin in preferential trade arrangements.